In the Face of Unemployment … Jordanians Slide into Poverty due to Coronavirus

In the Face of Unemployment … Jordanians Slide into Poverty due to Coronavirus

Ohoud Mohsen *


Adel, a Jordanian in his forties, awaits the press briefing of the Minister of State for Media Affairs, Amjad Al-Adayleh, every night, to find out the latest developments about the imposition of the prevailing curfew in the country, according to which all commercial and industrial sectors were out of work.


 Adel’s hopes diminish whenever the government decides to extend the curfew in order to restrict the spread of the Coronavirus, and to continue work stoppage in the non-vital sectors, due to his concern about his situation and that of his family, as he works as a sales representative for children’s toys, in a small company in Amman.


The work for Adel has stopped with the delivery of the last order on March 17, as he received his financial dues for a period of two weeks as calculated by the employer. The latter informed him and 5 other colleagues that the company will not be able to pay their salary during the period of the work discontinuity, because of the work stoppage.


The company’s action contravenes the cabinet’s decision to suspend formal and informal institutions for a period of four weeks starting March 2020, and to consider it an emergency public holiday in which the worker receives his full wages, as required by Article (59) of the Jordanian Labor Law.


Specter of Unemployment

Adel realizes that his work as a sales representative is related to continuity in the sale, and achieving a certain number of sales to increase the income so that he can secure the needs of his family. Today, he is practically without work, and he has no source of other income, while his family needs many requirements that he is unable to fulfill. This drives him to question the state’s role in protecting these workers and their families in exceptional circumstances, or if they stop working before they reach retirement age.


This case of Adel does not differ from those of other sales representatives. Some of them work on a daily basis; others are on the cadres of companies that chose to stop their obligations towards them with the government announcing the curfew decision. This decision included Ahmed, Sufyan, Saleh and Khaled who work as marketers for children’s toys, accessories and gifts in companies that abandoned them because they were unable to pay their salaries in anticipation of additional material costs, according to the workers.


They fear the days to come. Fear controls them and their families from losing work, even if they will be able to pay their house rent and meet the installments, which puts them in conflict with an unknown reality that bears the burdens of the family and children as well as securing a decent life for them.


Fear of Complaining

The head of the General Federation of Jordan Trade Unions, Mazen Al-Maaitah, confirmed that they received complaints from workers in multiple sectors, and many other workers who did not report a violation of their rights, or submit complaints, for fear of employers taking arbitrary measures against them, such as dismissal from work, and denying them to return to their jobs after the crisis ended. He indicated that others are not aware of the complaint mechanisms, that made complaints take an individual form, and reporting violations is relatively limited.


Al-Maaitah reiterates that sales representatives are part of Jordan’s workers, and their rights must be defended and their complaints followed, in case submitted to the union. Employers may not take any measures to deprive them from their rights, indicating that Defense Order No. 2 of 2020 clarified the matter, and they did not initiate the work suspension, but they adhered to the governmental order. Maaitah explained that the union is ready to receive any complaint, follow up on it, and safeguard workers’ rights, as no employer has the right to infringe on workers’ rights, endanger their job security and affect negatively on their social security. Both employers and workers are required to join efforts to remedy the negative effects that have hit the work sector as a result of the crisis.


The same things are confirmed by the Secretary General of the Ministry of Labor Farouk Al-Hadidi, saying that the doors of the ministry are open to receive complaints and that it follows everything that is sent to it in this regard within the limits of the law and the procedures followed. Hadidi stressed that employers must assume their responsibilities towards their workers according to the laws in force and implement what came in for the interest of everyone. What applies to the public employee currently applies to the employee in the private sector in terms of rights and privileges according to the government decision that was clear. Only those necessary to be at their work in the ministries and institutions are excluded by the decision of the Prime Minister based on the recommendation of the concerned minister.


But Mohamed Salama, the owner of a commercial company, refuses to hold employers responsible for layoffs of some workers in commercial institutions and companies, especially small ones, because the government decision to suspend public and private institutions came as a surprise and without warning. This made the financial conditions of the companies more difficult, and prevented many of them from delivering salaries and forced some to tell their workers to stop the contractual relationship until the crisis ended.


Salama indicates that the interruption of work during this period and the possibility of disruption for an additional period will cause significant losses to companies and lay off a large number of workers, due to the inability of institutions and their owners to secure the financial sums needed to restore the wheel of work. In the meanwhile, the government directed its support to the major institutions and did not pay attention to medium and small ones which threatens their presence in the first place, considering that the government should support Jordanian investors, regardless of the size of their investment, to ensure the continuity of their work, assume their obligations towards workers, and advance again after the end of the Coronavirus crisis.


Small Businesses Affected the Most

Writer and economic analyst Salama Al-Darawi finds that the effects of the Coronavirus will be heavy on various economies of the world, but its impact will be greater on developing economies that suffer mainly from weak structure and dependence on consumer behaviors.


In Jordan, Al-Darawi believes that small workers and owners of small and non-permanent businesses are among the sectors most affected. They are more vulnerable if we consider the accelerating effects of the crisis on the movement of the economy, and the ability of individuals to provide financial liquidity to secure their living requirements. This will lead, according to him, to higher poverty rates, as a result of the entry of new individuals into the unemployed segment, due to the inability of economic institutions in various sectors to continue their work. Another reason behind this is the failure of the government to provide an alternative plan for economic and social protection for marginalized groups going towards poverty, due to economic pressures and the inability to pay their living obligations. As a result, this will lead to social imbalances that will negatively affect the structure of society and threaten to create phenomena we are not accustomed to, which will maximize the impact of the crisis on the state as a whole, according to Darawi’s clarification. 


About 150,000 families are now below the poverty line, and receive economic support from government or semi-government institutions as follows, according to figures from the Department of Statistics: 30,000 benefit from the Zakat Fund, 30,000 from Tkiyet Um Ali, and 105,000 families from the National Aid Fund.


This economic damage will have social consequences, according to sociologist Dr. Hussein Al-Khuzai, who confirms that the post-Coronavirus period is the most difficult. With the increase in the possibilities of new groups entering the boundaries of poverty and perhaps extreme poverty, the most dangerous social stage will begin, with high indicators of violence resulting from economic pressure and the inability of many to secure the daily requirements of their families. The number of aid seekers from the state may increase, with the consequent multiplication of the economic costs of the crisis.


The results of a series of surveys of the Jordanian indicator issued by the Center for Strategic Studies on 2/4/2020 titled ‘Work, Workers, and Living Conditions under the Crisis and Curfew’, that (67%) of employers consider to layoff some employees and workers if the crisis, the curfew, and the lockdown procedures persists for a longer period. It also showed that (44%) of workers in the private sector did not receive their salaries for the month of March, and (36%) of them borrowed from family and friends to manage their living matters. Surveys stated that (78%) of workers in the private sector and day laborers were negatively affected by the curfew measures.


In a previous survey of the center released on March 30, the results showed that (80%) of Jordanians believe that the private sector (institutions, companies, and commercial stores) was negatively affected as a result of the curfew and the lockdown procedures. Also, (86%) expected that the governmental measures represented in closing most private sector, industrial, commercial and construction institutions will negatively affect this sector, especially day laborers, the poor, and people with limited income. Among Jordanians, (64%) find that continuing to impose curfews and disrupting the public and private sectors will lead to quarrels, family disputes and negative psychological and health consequences of the crisis.


Companies Exit the Market

Economist Khaled Al-Zubaidi believes that the problem is not only in some companies giving up their responsibilities towards their workers, but also the possibility of many companies leaving the economic market, worsening unemployment and high poverty rates.


The entire world is likely to be affected by the repercussions of the Coronavirus crisis, but to varying degrees. He also supports what Al-Darawi went to by saying that the economies of the already weak developing countries will be affected twice as much as the major industrialized countries. This is what prompted the World Bank to allocate $12b to help countries suffering from the spread of the Coronavirus, to alleviate economic damage.


Al-Zubaidi finds that Jordan can deal with the crisis by injecting financial liquidity into the national economy, in support of the continuation of the economy and agriculture, while paying attention to social and economic protection for individuals and institutions to avoid increasing poverty and unemployment, and entering into a deep economic recession.


What Al-Zubaidi said is in line with what the Central Bank announced recently as part of a package of measures to counter the impact of the emerging Coronavirus, and the challenges it poses to the national economy. This comes in order to contain the negative repercussions of the pandemic on the performance of the local economy. These measures are summarized by allowing banks to restructure loans to individuals and companies, especially medium and small, which have been affected by the repercussions of this virus. In addition, the bank is to pump additional liquidity to the national economy at JOD550m through reducing mandatory cash reserves, reducing financing costs and increasing the deadlines for existing and future facilities for economic sectors, including medium and small projects through the Central Bank program to finance and support the economic sectors. It will also support the procedures of the Jordanian loan guarantee company by reducing the company’s programs commissions and raising the insurance coverage percentage for the local sales guarantee program.


The government should also seek to secure soft loans and grants through international parties with which agreements can be concluded in this regard. Companies should gradually forget the distribution of profits to strengthen the capital and enhance the ability to survive, according to Al-Zubaidi, considering that the country should stimulate production and local industries to cover the needs. It should also reduce the mandatory reserve of banks to enhance their liquidity and ability to lend to individuals, while reducing interest and greater financing for investment, individuals, and profit rates. If done, this shall be in the interest of the economy and reducing interest, so that this will be reflected on investors and consumers, in addition to reducing sales tax and reducing fuel prices as an additional cost to the investors and consumers.


The provisions of Defense Order No. 6 of 2020, which the government announced on April 8, focuses on labor and employment issues, and includes texts on the nature of the organizational relationship between the worker and the employer, but it has not clarified an implementation mechanism.


* Supported by JHR

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